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March 30, 2011

RE: Federal Update for the period ending March 25, 2011

I. No Spending Agreement in Sight
Senators Sign Letter Urging Level CDBG Funding
III. House Passes Bill to Eliminate Neighborhood Stabilization Program
IV. House Likely to Eliminate HAMP Foreclosure mitigation Program
House Outlines Transportation Program Framework
VI. Department of Justice Announces Multiple Crime Prevention Grants
VII. NLC Seeks EPA Consultation on Waters of the U.S. Guidance
VIII. NLC Sponsors Upcoming Rail Conference

Dear Mayor:

The past few weeks in Washington have been busy with issues affecting municipalities. Here’s a rundown based on reports provided by our eyes and ears in the District of Columbia – the Federal Relations Staff of the National League of Cities (NLC).

I.     No Spending Agreement in Sight

The House and Senate continue to search for an agreement on spending levels for the remainder of the current fiscal year, which ends on September 30, 2011. Negotiators hope to have resolved their differences by April 8, when the current stopgap law expires. If Congress cannot clear a new spending law by then, lawmakers will have to enact another stopgap measure to avoid a government shutdown. So far this fiscal year, Congress has moved six stopgap vehicles. 

II.   Senators Sign Letter Urging Level CDBG Funding

On March 16, 29 senators signed a letter urging the Senate Appropriations Committee to "preserve funding for one of the most effective federal programs for promoting economic development, the Community Development Block Grant (CDBG) program." 

The letter, authored by Senator Patrick Leahy, specifically asks the Committee to maintain funding for the CDBG program at the current level of nearly $4 billion in the Fiscal Year 2011 spending bill. Unlike in past years, the Senators' CDBG support letter failed to gain a single Republican signature. New Jersey’s Senators Frank Lautenberg and Bob Menendez have signed the letter. Please thank them and let them know the difference CDBG is making in your community.

III.    House Passes Bill to Eliminate the Neighborhood Stabilization Program

Also on March 16, the House passed the Neighborhood Stabilization Program (NSP) Termination Act (H.R. 861), by a vote of 242 to 182. The bill rescinds $1 billion in unobligated funds previously approved by Congress for distribution to cities and towns with high rates of home foreclosure. Local governments use NSP funds to purchase and redevelop, or demolish, vacant and abandoned homes.

During debate, congressional NSP supporters highlighted NLC's opposition to the bill. Two Republicans, Congressmen Steve LaTourette and Michael Turner of Ohio, joined the majority of Democrats in opposing the bill, while five Democrats joined the majority of Republicans in support.

Although the legislation passed in the House, the President has indicated he would veto the bill, making it unlikely to gain consideration in the Senate. The U.S. Department of Housing and Urban Development also issued a statement informing NSP grantees, which had to apply for NSP funds by March 1, that the House vote will not impact their ability to draw down on NSP funds once grant agreements are executed. 

IV.    House Likely to Eliminate HAMP Foreclosure Mitigation Program

On Tuesday, March 29, the House approved the Home Affordability Modification Program (HAMP) Termination Act (H.R. 839), which, would eliminate a program that helps homeowners at risk of foreclosure modify home mortgages to bring down monthly mortgage payments. NLC supported HAMP when it was enacted under the Wall Street Reform and Consumer Protection Act of 2009 and remains opposed to any legislation that would eliminate the program.

Earlier this month, the House passed bills to eliminate two other federal foreclosure mitigation programs: the Federal Housing Administration Refinance Program Termination Act (H.R. 830) and the Emergency Mortgage Relief Program Termination Act (H.R. 836). Taken together, the three bills would eliminate the ability of the federal government to have any meaningful impact on the lending industry's approach to foreclosure mitigation.

The President has threatened to veto all three bills (H.R. 830, H.R. 836, H.R. 839) if they reach his desk.

V.    House Outlines Transportation Program Framework

Earlier this month, the House Transportation and Infrastructure Committee offered some hints about how it plans to frame a new federal transportation program. In an outline submitted to the House Budget Committee, the Committee indicated it will reject the President's proposal to increase funding and intends to "cut costs, streamline programs, consolidate facilities, eliminate waste" and focus on "national priorities." According to the outline, the Committee will take the lead in putting together authorization legislation along with the Senate Committee on Environment and Public Works. Congressional committee leaders have indicated they would like to bring a bill to their respective committees by May and have it to the President by the end of the fiscal year when the extension of the current program expires.

The report also indicated that the Committee will not support any fee increases and it will oppose any further transfers from general Treasury funds, which will result in a bill less than current spending levels. Since public transportation funds come from both Highway Trust Fund revenues and general revenue, there is great concern that programs such as New Starts and Small Starts transit programs could be at risk in a new bill. The Committee also called for cuts to Amtrak operating and capital assistance.

The House committee will begin hearings in Washington this week. Local officials are encouraged to speak to your congressional representatives when they are at home to talk about the critical importance of transportation programs to your community and why investments in local economies and jobs are "national priorities." 

VI.    Department of Justice Announces Multiple Crime Prevention Grant Solicitations

The U.S. Department of Justice recently invited local governments to apply for several grant opportunities supporting innovative crime reduction programs. Grant programs currently open for solicitations include the Smart Policing Initiative, the Field-Initiated Programs Competitive Grant Program, the Second Chance Act Juvenile Mentoring Initiative, and the Community-Based Violence Prevention Demonstration Program.
The Smart Policing Initiative and Field-Initiated Programs Competitive Grant both seek to build upon data-driven, evidence-based, innovative approaches to reducing crime. Both of these grants will be open until April 21. The Second Chance Act Juvenile Mentoring Initiative, which provides funds for mentoring and other transitional services essential to reintegrating juvenile offenders into the community, will be open until May 2.
Finally, the Community-Based Violence Prevention Demonstration Program is a new initiative that builds and maintains programs like the ones adopted by municipalities through NLC's Institute for Youth, Education, and Families' California Cities Gang Prevention Network. These communities have adopted multi-strategy, multi-disciplinary approaches to reducing the violence that has adversely affected youth, families, and neighborhoods across America. Cities interested in receiving grant funding for similar programs may apply for this demonstration program through May 23.

Details about these and other criminal justice grants can be found at and

VII.   NLC Seeks EPA Consultation on Waters of the U.S. Guidance

In a letter to the Office of Management and Budget (OMB), NLC raised potential concerns with the Clean Water Protection Guidance the U.S. Environmental Protection Agency recently submitted to OMB for review and urged OMB to return the document back to the agency for consultation with state and local governments.
Although the guidance document has not yet been released publicly, expected provisions could have the practical effect of expanding federal jurisdiction under the Clean Water Act effectively preempting existing state authority. To view a copy of the letter, click here.

VIII.    REMINDER: NLC Sponsors Upcoming Rail Conference

Join your state and local colleagues next month in Naperville, Illinois, at an NLC-sponsored conference: "Moving Freight and Passengers in the 21st Century." The event will take place April 27-29 and will serve as a great opportunity to discuss important rail concerns.

NLC is looking forward to collaborating with our colleagues at the National Association of Counties and National Association of Regional Councils to develop a local agenda on freight and passenger rail issues, which are so critical to economic growth and vitality in communities across the nation. For more information, visit

Issues with freight rail continue to be flashpoints within many communities, and this event presents a unique opportunity to establish a greater local voice in this debate and to discuss freight and passenger rail issues with your colleagues, the U.S. Department of Transportation, and other key industry players. The two-day conference outside of Chicago will end with a half-day discussion on how city, county, regional, and state governments can work together with passenger and freight rail industry to reduce the negative impacts of freight rail movement on communities and improve passenger rail service. Click here to download an event flyer.

For more on any of these items, contact Jon Moran at 609-695-3481, ext. 121 or

Very truly yours,

William G. Dressel, Jr.
Executive Director



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